Mobile broadband losses counteract Optus handset growth in Q2 2014

Optus has suffered losses in mobile broadband subscriptions as customers moved to data sharing plans in the quarter year ending 31 October.

The number-two Australian telco, a subsidiary of SingTel, lost 4000 total mobile subscriptions in the quarter and now has about 9.4 million customers. That represents a 1 per cent decrease from the same period in 2013, when it had almost 9.5 million customers.

However, an Optus spokesperson said the introduction of new data sharing plans led to the mobile broadband losses. Under the plans, Optus customers can share data across handsets and dongles. Optus only counts data sharing customers once, the spokesperson said.

Optus shed 69,000 mobile broadband subscriptions in the quarter. At the end of the quarter, it had 1.25 million mobile broadband subscriptions, down 14.2 per cent from the same quarter last year.

This was offset by a net addition of 65,000 mobile handset customers, with 60,000 consumer additions and 5000 enterprise adds.

Even with the net customer loss, Optus posted $2.16 billion revenue in Q2 2014, representing a 1.7 per cent increase from the same quarter last year. It was also $100 million more than the telco recorded in the previous quarter.

Optus customers are spending more money than they had before. Optus reported a 7 per cent increase in data revenue for the quarter and a 2 per cent increase in blended average mobile revenue per user compared to the same quarter last year.

Also, Optus reported a $230 million net profit, up 5.4 per cent year on year, and $652 million in EBITDA, up 1.2 per cent year on year.

Costs related to rolling out the 4G network resulted in a 42 per cent dip in free cash flow from the same period last year. Optus ended the quarter with $138 million in cash.

Also, the telco spent $652 million on spectrum in the 2.6GHz and 700MHz bands.

“Optus achieved solid sales momentum during the period with strong demand for My Plan Plus and data sharing plans, combined with a compelling ‘Switch’ postpaid mobile offer and a revitalised portfolio of prepaid plans,” Optus CEO Allen Lew said in a statement.

“Expanding our national 4G network to 90% of the population by April 2015 underpins Optus’ strategy for driving long term data revenue growth. We are well on schedule to turn on new 4G spectrum in all state capital cities and over 100 regional towns throughout January 2015.”

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